I. Introduction 

To ensure that business operations align with the vision and mission of PT Pakuwon Jati Tbk (“the Company”), and to serve as a foundation and guideline for the Sustainability and Environmental, Social, and Governance Committee (“Sustainability & ESG Committee”) in strengthening the integration of sustainability principles into business strategies and operations.

II. Purpose

This Sustainability & ESG Committee Charter has been drafted to serve as a guideline to ensure that the Sustainability & ESG Committee can carry out its duties and responsibilities efficiently, effectively, transparently, independently, and accountably.

III. Organizational Structure

  1. The Sustainability & ESG Committee consists of 3 (three) sections, namely:
    • Climate and Environment;
    • Human Resources (HR), Health, and Occupational Health and Safety (OHS); and
    • Corporate Social Responsibility (CSR).
  2. Members of Sustainability & ESG Committee are appointed and dismissed by Board of Directors with the approval of Company’s Board of Commissioners.
  3. Chairman of Sustainability & ESG Committee is one of the members of Company’s Board of Directors.
  4. The term of office for members of Sustainability & ESG Committee is 3 (three) years, but shall not exceed the term of office of Company’s current Board of Directors, and members may be reappointed without prejudice to the right of the Board of Directors and/or the Board of Commissioners to remove them at any time, with or without cause;
  5. The term of office of a member of Sustainability & ESG Committee automatically ends if such member:
    • the expiration of his or her term of office;
    • passes away;
    • no longer being employed by the Company or an affiliate of the Company; or
    • dismissal by Board of Directors and/or Board of Commissioners, with or without cause.
  6. Board of Directors, with approval of Board of Commissioners, is authorized to appoint a replacement for any member of Sustainability & ESG Committee who resigns or is removed from office before the end of their term. The term of office of the replacement shall be the remainder of the term of Sustainability & ESG Committee member they are replacing, or a specific period as determined by Board of Directors.

 

IV. Roles and Responsibility

In carrying out its mandate, Sustainability & ESG Committee is responsible for ensuring integration of Environmental, Social, and Governance (ESG) principles into the Company’s business strategy, operations, risk management, and decision-making.

The section duties and authorities for each function is as follows:

  1. Committee Chairman

    Committee Chairman serves as the strategic leader and primary decision-maker in the implementation of the Company’s sustainability agenda, with the following responsibilities:
    • Establishing policy direction, strategies, targets, roadmaps, and sustainability performance standards, including aspects related to climate change and transition to a low-carbon economy.
    • Ensuring integration of ESG aspects into the Company’s strategic planning and work plans.
    • Monitoring effectiveness of sustainability program implementation and conducting periodic evaluations of target achievement.
    • Provide corrective action guidance regarding deviations or risks that could potentially hinder achievement of ESG targets.
    • Report on progress of sustainability initiatives to Board of Directors and/or Board of Commissioners in accordance with applicable mechanisms and governance procedures.
       
  2. Climate and Environment Section

    This division is responsible for managing and controlling the Company’s environmental impact, with the following scope of duties:
    • Developing key performance indicators for the environmental sector, including but not limited to greenhouse gas emissions, energy efficiency, waste management, and resource use.
    • Setting short, medium, and long-term targets in accordance with relevant regulations and national and international standards.
    • Identify and manage risks and opportunities related to climate change.
    • Implement climate change mitigation and adaptation programs.
    • Conduct internal outreach and consult with stakeholders regarding environmental policies and performance.
    • Conduct strategic studies to improve the Company’s ESG rating and reputation in environmental matters.
       
  3. Human Resources (HR), Health, and Occupational Safety and Health (OSH) Section 

    This division is responsible for managing social and labor-related matters, with the following duties:
    • Developing performance indicators and targets for the social sector, including labor issues, diversity and inclusion, competency development, and the protection of workers’ rights.
    • Ensuring the implementation of the Occupational Health and Safety (OHS) system complies with applicable laws and regulations.
    • Identify and mitigate social risks that could potentially impact the Company’s operations.
    • Implement programs to enhance employee competencies, well-being, and a sustainable work culture.
    • Conduct outreach and communication with employees and stakeholders regarding social policies and occupational safety and health (OSH).
    • Conduct strategic studies to improve the ESG rating in the social aspect.
       
  4. Corporate Social Responsibility (CSR) Section

    CSR Section focuses on the Company’s social contributions outside of its core business activities, with the following responsibilities:
    • Developing social responsibility strategies and programs aligned with the Company’s sustainability vision.
    • Establishing performance indicators and targets for CSR programs in accordance with regulations and rating standards.
    • Implementing the 5 (five) pillars of the CSR program: Pakuwon Cares & Shares, Community, Education, Environment, and Healthy Together.
    • Ensuring the effectiveness, transparency, and accountability of CSR program implementation.
    • Conducting impact assessments of CSR programs.
    • Conducting strategic studies to improve the Company’s ESG rating and strengthen its reputation and public trust.


V. Meeting

  1.  Meetings of the Sustainability & ESG Committee may be held at least once every three months or more frequently if deemed necessary at the request of one or more committee members.
  2. A meeting of the Sustainability & ESG Committee is considered valid if attended or represented by more than half of all committee members.
  3. Meetings of the Sustainability & ESG Committee are chaired by the Committee Chair; if the Chair is absent or unable to attend, the meeting is chaired by a member who is present and designated by the Chair.
  4. Decisions of the Sustainability & ESG Committee meeting must be made by consensus. If a decision by consensus cannot be reached, the decision must be made by a vote requiring the approval of more than half of the committee members present.
  5. If the number of votes in favor and against is equal, the Committee Chair shall determine the decision to be made.
  6. The Sustainability & ESG Committee may invite other parties to serve as resource persons at committee meetings, if necessary.
  7. The Sustainability & ESG Committee may also make valid decisions without holding a meeting, provided that all committee members have been notified in writing and all committee members have approved all proposals submitted in writing and signed such approval.
  8. Decisions made in this manner have the same legal force as decisions validly made at a Committee Meeting.

 

VI. Reporting 

  1. Chairman Committee submits reports on the implementation of work directly to the President Director and/or the Board of Commissioners;
  2. Sustainability & ESG Committee may submit periodic reports on the implementation of activities at least once a year to the President Director and/or the Board of Commissioners; such reports shall consist of:
    • A performance evaluation report on the implementation of activities; and
    • Important decisions/conclusions/recommendations regarding the implementation of ESG.